T Bailey’s multi-managers have ditched passive funds across their three multi-manager products as US markets continue to break through record levels.
Co-managers Peter Askew and Elliot Farley have invested in US-based funds including Vulcan Value Equity and Janus US Venture in their flagship £177.2m T Bailey Growth fund within their 26.7 per cent allocation to US equities.
Mr Askew said: “The US market looks challenged next year. Historically it has been hard to find which can outperform so we might have to scratch beneath the surface a bit more.”
Also within their US exposure the managers had a 5 per cent position in the Hermes US SMID Equity fund in the Growth portfolio, according to its October 31 factsheet. Mr Farley said he planned to maintain the position in spite of the departure of co-manager Robert Anstey.
“All the value in the fund didn’t leave with Robert,” Mr Farley said. “It’s a team-based approach so there is a team of people doing the ground work.”
The duo is also using US equity funds to access healthcare, a growing theme within their funds, in addition to a new position in the Polar Capital Healthcare Opportunities fund, which is managed by Gareth Powell and Dan Mahony.
Elsewhere in the Growth fund the managers have been reducing exposure to emerging markets funds run by First State and Aberdeen, which have both imposed punitive charges to discourage new investment.
Instead, Mr Askew and Mr Farley have been moving money to Asian-focused products such as the Coupland Cardiff Asia Evolution fund, the Prusik Asian Equity Income fund and frontier markets funds run by Schroders and BlackRock.
T Bailey last week announced plans to cut fees on the three multi-manager funds by 15 basis points and remove ‘cautious managed’ from two products.
The group is reducing its annual management charge on the products’ institutional share classes – which are available on most platforms for retail investors – from 0.75 per cent to 0.6 per cent. This will take effect from January subject to regulatory approval.
In addition, the T Bailey Dynamic Cautious Managed and T Bailey Defensive Cautious Managed funds will be renamed as T Bailey Dynamic and T Bailey Defensive.
He added that the name change would remove any confusion between the two multi-asset products, which in spite of having similar names have different targets and are rated differently by Distribution Technology.